A Simplified Ad Tech Stack: The Key To Protecting Working Media

“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Oleg Korenfeld, senior vice president of ad tech and platforms at Mediavest USA.

It may sound simplistic, but what is the most expensive thing marketers pay for?

It’s not the people who support the media buying, from strategy, planning and activation to support and analytics. It’s not the technology that manages data and delivers and optimizes media. It’s not the platforms that measure it all.

It is actually the media itself.

If there is a way to leverage technology to cut spending and deliver the same or better return on investment (ROI), the investment into these technologies and supporting skill sets would be much more acceptable. Asking a DSP, which is too far away from impression origin, to lower the CPM as optimization for poorly performing campaigns seems counterintuitive in RTB environments. The true value should be the performance output of the overall investment. This additional tech investment that helps drive up the value of that output should be considered part of new working media.

The industry is very comfortable buying media from a multitude of ad networks, demand-side platforms (DSPs), publishers and other suppliers. We know how to negotiate rates for scalable reach and the unique optimization methods each one media supplier offers. We are also getting more comfortable with using first-, second- and third-party data to inform the media even further to drive more efficiency, by understanding the user better as we apply these segments on all supply sources at once.

But what we are still not very comfortable with is simplifying our overengineered ad tech stacks. In order to drive better deduplication and global message frequency capping against true uniques, this can no longer be avoided.

A Vicious Cycle

If we are onboarding the same audience segments to different media suppliers because we like their sales propositions, but they do not talk to one another, we are basically cannibalizing our own efforts and bidding against ourselves. This audience fragmentation defeats any optimization efficiencies provided by each supplier, manual or automated.

As a result, we are buying much more media than necessary to hit our ROI goals. So we go back to media CPMs to see if lowering them will help overall ROI. But what we get is even lower-quality inventory, and the vicious cycle continues.

Trimming The Stack

So how do we simplify the ad tech stack and still take advantage of scale and the different features some technologies offer? What would an audience-first strategy look like in the day-to-day planning and activation process? How do we become more agile in aligning access to supply to get as close to the publisher as possible on every impression bought programmatically?

The first step is to get a full handle on the audience strategy that includes an accurate understanding of a true unique. This means moving away from third-party cookies to different forms of IDs. After a device graph is built against that audience, it’s possible to assign first-, second- and third-party data to the identified and deduplicated audience. A data-management platform (DMP) is required to accomplish this.

Considering where the industry is moving in terms of the precision and personalization of media buying, there is just no way to manage audience accuracy and attribution without a DMP at the center of a digital buying strategy. With the DMP in place the fragmentation of media spending is something that can be measured and taken action on, out of the same source. And when you calculate how much excess media was bought to hit goals, it becomes obvious: The investment in the technology to prevent overspending would pale in comparison.

Abandon The Silos

The next step involves getting control of the media supply waterfall and without managing it in silos. A good place to start is with securing programmatic direct and private marketplace deals with top publishers.

But that will not provide enough scale, especially if one wants very specific audiences. If you go to supply-side platforms to access the second tier of publishers that can provide scale, the overhead will still remain small. The exchanges and other DSPs are other options if there isn’t enough media to reach specific segments.

This blended approach should protect the margin on every dollar spent by cutting out extra tech hops along the way when there is an opportunity to reach users more directly on every request. This will also benefit publishers because they will see a higher return on every impression they make available, thus giving them an incentive to offer higher-quality inventory.

The Challenge Of Fragmentation

Finally, the last step would be to hire experts who truly understand the critical nuances of what tech is and isn’t necessary, as well as what order to stack the whole thing. Part of the reason why there is so much complexity is because the industry asked for these siloed tech approaches that addressed very specific things, without taking the time to understand the repercussions of that fragmentation.

There is no one technology that is good at everything. Experts are needed to help companies understand which tech is best and how to simplify existing assumptions where possible, by working together and alongside the rest of the digital strategy and planning teams.

Remember John Wanamaker’s famous problem: “Half the money I spend on advertising is wasted; the trouble is I don't know which half.”

If these three steps are aligned, I think we can start believing that the scales of measurable performance vs. waste will tip in the right direction.